Saturday, 15 June 2013

Sanjeev Kumar is the head of
the insurance practice at Saama Technologies, a business analytics services
company.

hass associates cyber tips and fraud reviews

Ten percent of the incurred losses and loss adjustment expenses
each year in the property & casualty insurance industry are due to
insurance fraud, according to an analysis by The Insurance Information
Institute (III). Worse yet, the number of fraudulent claims are on the
increase—statistics from the National Insurance Crime Bureau (NICB) show a 19
percent increase in questionable claims from 2009 to 2011.

However, most suspicious claims are paid by the insurers; it is
estimated that today only one in five fraudulent claims are detected or denied
by insurers. Thus insurance fraud costs insurers tens of billions of
dollars each year in an industry where margins are thin, and as a result
increases premiums for everyone.

P&C insurance fraud may be committed at different points in
the transaction, most typically by:

·Applicants when they
misrepresent facts on an insurance application.

·Policyholders as they
file false or inflated claims (or deliberately perpetrate a crime, such as
arson).

·Third-party
professionals, such as body shops, that provide services to claimants through
excessive billing of vehicle body parts or repair work.

·Employees, such as
adjusters, who may be ‘involved’ in the group.

·Agents who may
backdate a policy prior to loss date.

Fraud is not just limited to property and casualty
insurance. According to the National Health Care Anti-Fraud Association,
up to ten percent of the nation’s annual healthcare outlay is lost to fraud and
abuse. Fraud in the healthcare insurance industry occurs in multiple
forms, such as stolen physician or patient identities, phantom providers and
patients, up-coding, unnecessary cosmetic services, false bills, unnecessary
diagnostic services, overtreatment, stacked diagnoses and high-fee services.

If insurers can identify and deny fraudulent claims, they not
only improve their loss ratio (which increases margins), but more importantly,
they also lower future increases in premiums (which gives them a competitive
advantage). Fraud analytics addresses this issue by enabling insurers to
identify fraud and alert investigators for further analysis.hass
associates cyber tips and fraud reviews